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International Journal of Physical Distribution & Logistics Management

The impact of logistics uncertainty on sustainable transport operations


Vasco Sanchez-Rodrigues Andrew Potter Mohamed M. Naim
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Vasco Sanchez-Rodrigues Andrew Potter Mohamed M. Naim, (2010),"The impact of logistics uncertainty
on sustainable transport operations", International Journal of Physical Distribution & Logistics Management,
Vol. 40 Iss 1/2 pp. 61 - 83
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Sustainable
The impact of logistics transport
uncertainty on sustainable operations
transport operations
61
Vasco Sanchez-Rodrigues, Andrew Potter and Mohamed M. Naim
Cardiff University Innovative Manufacturing Research Centre, Cardiff, UK Received March 2009
Revised September 2009
Abstract Accepted October 2009
Purpose The purpose of this paper is to refine a logistics triad uncertainty model taking a supply
chain perspective, to determine and assess the different causes and sources of supply chain
uncertainty that impact on the sustainability of the UK road freight transport sector.
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Design/methodology/approach To clarify the link between sustainability and transport


uncertainty, a methodological triangulation strategy is applied combining the results of eight focus
groups and an online structured questionnaire.
Findings The findings indicate that the main drivers impacting the sustainability of transport
operations are delays, variable demand/poor information, delivery constraints and insufficient supply
chain integration. The consequence of these problems is to reduce the efficiency of transport
operations.
Research limitations/implications The model has been refined based only on participants
perceptions. Therefore, the finding should also be verified through the investigation of real-world
situations. Moreover, the transport uncertainty model needs to be incorporated within a wider
business process re-engineering approach to evaluate solutions to reduce transport uncertainty within
supply chains.
Practical implications The findings further strengthen the understanding of the main
uncertainty sources within supply chains in the UK. The internal root causes of uncertainty can be
mitigated while external issues have to be accommodated; therefore, mitigation techniques, methods
and strategies for reducing external and internal supply chain uncertainty in transport operations need
to be identified through the research.
Originality/value This paper determines the industry perceived economic and environmental
risks associated with transport operations in four UK sectors.
Keywords Transport management, Risk management, Sustainability, Supply chain management,
Freight forwarding, United Kingdom
Paper type Research paper

Introduction
Supply chain uncertainty is a major obstacle to the delivery of superior customer value
(Davis, 1993; Mason-Jones and Towill, 1998). Manufacturing companies in the supply
network will typically mitigate variability by investing in more robust information and
communication technology (ICT) systems or else buffer themselves against such
variations through inventory. Either way, uncertainty leads to increased total costs.
Traditionally, the focus of managing uncertainty has been on manufacturing
operations and comparatively little attention has been paid to the causes and International Journal of Physical
consequences of uncertainty within freight transport operations. However, it is being Distribution & Logistics Management
Vol. 40 No. 1/2, 2010
increasingly recognised that transport represents an important part of the supply chain pp. 61-83
(Stank and Goldsby, 2000) and that the performance of transport can impact upon the q Emerald Group Publishing Limited
0960-0035
wider supply chain (Tracey, 2004). Consequently, there are requirements for increased DOI 10.1108/09600031011018046
IJPDLM flexibility in transport services to meet a variety of customer demands, and the
involvement of the shipper, carrier and customer as part of a logistics triad (Bask, 2001;
40,1/2 Naim et al., 2006). Uncertain events can affect the ability of transport operations to
satisfy customers. Therefore, a need exists to codify and examine the causes of freight
transport uncertainty as a means of improving the effectiveness of management.
A conceptual model that categorised the causes of supply chain uncertainty
62 impacting on transport operations has previously been developed (Anon, 2008). At this
stage of our research, the relative importance of these causes of supply chain
uncertainty needs to be determined by measuring the level of risk that they represent
for transport operations. Our aim is to refine this model by taking a supply chain
perspective, and assess the risk that different causes and sources of supply chain
uncertainty have in terms of the sustainability of road transport operations in a UK
context.
To do this, the paper proceeds by introducing the literature on supply chain
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uncertainty. After that, the potential links between supply chain uncertainty and
sustainability are established through the application of a conceptual framework
previously developed in the green logistics literature. The methodology applied to
undertake the research is explained, and subsequently, the results of the study are
presented and analysed. In the last section of the paper, the main research findings are
highlighted together with further research opportunities.

Supply chain risk, vulnerability and uncertainty


Sometimes the term uncertainty is confused with risk, so it is important to clarify how
these two concepts differ. According to van der Vorst and Beulens (2002):
Supply chain uncertainty refers to decision making situations in the supply chain in which
the decision maker does not know definitely what to decide as he is indistinct about the
objectives; lacks information about its environment or the supply chain; lacks information
processing capacity; is unable to accurately predict the impact of possible control actions on
supply chain behaviour; or, lacks effective control actions.
Uncertainty occurs when decision makers cannot estimate the outcome of an event or
the probability of its occurrence. By contrast, risk is a function of outcome and
probability and hence it is something that can be estimated. If the likelihood that an
event could happen is low but the impact of that event can have a highly detrimental
impact on performance, its occurrence represents a significant risk. However,
uncertainty increases the risk within supply chains, and risk is a consequence of the
external and internal uncertainties that affect a supply chain.
A considerable amount of research has been undertaken on uncertainty in supply
chain management, but in such work transport has typically been regarded as a
marginal activity within supply chains and has not been considered explicitly. Davis
(1993) defined three distinctive sources of manufacturing uncertainty shippers,
manufacturing and customers. From the work of Davis (1993), Mason-Jones and Towill
(1998) developed the uncertainty circle model as a way of defining the different sources
of uncertainty that affect supply chain performance. They confirmed that uncertainty
is a strategic issue in supply chains, and suggested that it originates from four main
sources: the supply side, the manufacturing process, the control systems and the
demand side (Mason-Jones and Towill, 1998). Subsequently, the uncertainty circle
model has been extended and adapted. van der Vorst and Beulens (2002) develop
a typology of supply chain uncertainty adding three dimensions to each source of Sustainable
uncertainty quantity, quality and time. Geary et al. (2002) identify the main issues transport
associated with different types of uncertainty based on research from the automotive
sector. They link the causes and effects of uncertainty or supply chain disruption, such operations
as data errors or excess variances. Furthermore, Peck et al. (2003) add a dimension of
exogenous events to the uncertainty circle, e.g. political problems and/or natural
disaster that can cause unexpected disruptions within the supply chain. 63
Transport uncertainties in the supply chain can increase risk and vulnerability.
Based on the aforementioned criticism regarding transport in these uncertainty
frameworks and the logistics triad concept, Anon (2008) developed the logistics triad
uncertainty model. As shown in Figure 1, this model includes five uncertainty sources
that can have a negative effect on transport operations. This represents an expansion
of the literature on manufacturing uncertainty. The uncertainty types are defined as:
(1) Shipper. Any uncertainty originating from of the point of despatch for the
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goods, which directly impacts upon transport performance. These may relate to
raw material sourcing, the production process or the activities involved in the
loading process.
(2) Customer. Any uncertainty initiating from the receiver of products, e.g.
forecasting and ordering products or any delivery restrictions imposed by the
customer.
(3) Carrier. Any inefficiency originated by the carrier and directly affecting the
delivery process, such as vehicle breakdown or insufficient drivers.
External External
uncertainty uncertainty
Control
systems

Carrier
Supplier Customer

External External
uncertainty uncertainty
Figure 1.
Physical flow Information flow Relationships Logistics triad uncertainty
model
Source: Anon (2008)
IJPDLM (4) Control systems. Any issues originated by inadequate and fragmented ICT
40,1/2 systems within the logistics triad, or the lack of physical quality control systems.
(5) External uncertainty. Any disturbance caused by external factors that are not
under the control of the supply chain, including unplanned road congestion and
volatility of fuel prices.

64 Linking supply chain uncertainty to sustainability


Recently, the link between the supply chain and the sustainability of transport
operations has been established at a macro-level. McKinnon (2007) developed a
framework where six sustainability ratios link supply chain processes with the CO2
emissions of freight transport operations (Figure 2). However, these ratios can also be
influenced by uncertainty in freight transport at an operational level. In the specific
case of road freight transport, as we can shown Figure 2, there are six ratios that can
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impact on the level of CO2 emissions of transport operations. These ratios are handling
Outputs Key ratios

Weight of goods
consumed

Handling factor

Weight of goods
transported
Average length
of haul

Total tonne-Km

Modal split

Road tonne-Km Average load on


laden trips

Average % of
Total vehicle empty running
Kms

Fuel efficiency

Energy
consumption

Figure 2.
Framework for analysing Carbon
opportunities for CO2 emissions
reduction
Source: McKinnon (2007)
factor (the number of links in the supply chain), average length of haul, modal split, Sustainable
average load on laden trips, average empty running and fuel efficiency (McKinnon, transport
2007). Transport uncertainty can have a negative impact on these key ratios:
(1) Handling factor. This is affected by supply chain structure. At an operational
operations
level inappropriate sourcing in terms of supplier unreliability and wrong
location (Christopher and Lee, 2004; Giunipero and Eltantawy, 2004), problems
in supplier capacity (Cavinato, 2004) and location and storage uncertainty 65
(van der Vorst and Beulens, 2002; Fowkes et al., 2004) can have a negative
impact on supply chain structure. These can make the information flow and
communication between supply chain partners less transparent and reliable.
(2) Average length of haul. The efficiency of vehicle routeing influences this ratio.
A rigid routeing plan can lead to inefficiencies in the transport routeing process
(Naim et al., 2006). This can cause diversions due to unplanned congestion.
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Also, insufficient fleet capacity can be a cause of disruption of transport


operations, delaying the delivery process to customers (Fowkes et al., 2004).
This can have an adverse effect on the frequency and ultimate on the length of
delivery.
(3) Modal split. The choice of transport mode can affect this ratio. Carriers usually
need to interlink their operations with other less polluting transport modes like
rail and water. Lack of communication between 3PLs and other transport
modes can inhibit opportunities to achieve modal shift (Choy et al., 2007).
Moreover, unpredictability in arrival times and reduction in the efficiency of
multimodal hubs can inhibit the split from road to rail (Fowkes et al., 2004).
(4) Average load on laden trips. This ratio can be affected by two factors: vehicle
utilisation on laden trips and vehicle carrying capacity by weight and volume.
If carriers have single vehicle configuration, carriers are forced to choose a type
of vehicle which may not always match the customer requirements in terms of
volume and commodity type (Naim et al., 2006). Also, transport delays due to
inefficiency at the shipper and/or carrier can have a negative effect on the
average load on laden trips (McKinnon and Ge, 2004), since due to delays a
potential full load in a single vehicle can become two half-full vehicles.
(5) Average empty running. The level of back haulage can affect this ratio. If
demand for transport is not managed in a holistic way, empty miles between
destination of inbound shipments and origin of outbound shipments can
increase (Esper and Williams, 2003), and as a result, the overall vehicle
utilisation can decrease. The level of back haulage is a key factor in achieving
high levels of fleet utilisation. Difficult and non-standard orders in terms of
location of destinations can have a negative effect on the level of back haulage
(Boughton, 2003; Fowkes et al., 2004; Vickery et al., 1999).
(6) Fuel efficiency. The degree of exposure to traffic congestion can affect this ratio.
Road congestion is increasingly affecting transport operations (McKinnon and
Ge, 2004). If congestion levels are predictable, then this can be planned for, but
in many cases congestion results in variable and less predictable travel times
and hence a less reliable service (van Schijndel and Dinwoodie, 2000; Golob and
Regan, 2001). However, when a lorry is running at low speed because of high
levels of traffic congestion its fuel efficiency can be negatively affected.
IJPDLM Supply chain uncertainty can significantly impact on the efficiency of transport
40,1/2 operations. Inefficiencies in road freight transport can cause an increase in the level of
CO2 emissions in supply chains. Therefore, the mitigation of supply chain uncertainty
within transport operations can minimise the risk of disruptions in the delivery
process, so transport resources can be utilised in the most efficient and less polluted
manner. This paper aims to determine and assess the causes and sources of supply
66 chain uncertainty that impact on the sustainable performance of the UK road freight
transport sector.

Method
The research was undertaken in two phases. In Phase 1, a series of eight focus groups
were run to explore the root causes and sources of supply chain uncertainty in transport
operations. In Phase 2, a wider scale survey was undertaken to assess the impact
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that the uncertainty sources, derived from the focus groups phase, have on the
sustainability of transport operations. In order to achieve an appropriate balance
between research rigour and industrial relevance, a methodology triangulation
research strategy was applied as recommended by Easterby-Smith et al. (1993),
New and Payne (1995), Arlbjorn and Halldorsson (2002) and Mangan et al. (2004).
In Phase 1, a series of eight focus group discussions were held from late March to
early July 2007 in six different locations across the UK. An invitation letter together
with an information pack that described the aim of the focus groups was sent to
192 potential participants. The invitees were from manufacturers, retailers, 3PLs,
technology providers, trade associations, government and logistics consultancy
companies were initially invited. From the initial mailing, 26 positive responses were
received. A follow-up process was undertaken. This consisted of a telephone call to all
the invitees that did not respond in the first place followed by an electronic invitation
sent by email. As a result, the final number of participants was 65, giving a response
rate from 192 invites of 34 per cent. The aim was to have eight participants per focus
group, as this represents the optimum size according to Krueger (1998). In reality, the
size of focus group varied between 5 and 12 (Morgan, 1998).
Each session ran from 9:30 a.m. till 12:30 p.m. and had a coffee break of 20 minutes.
At least two of the authors were present, one to facilitate and the other to take notes.
Audio recordings were also taken and, with the notes, formed a written transcript of
each focus group.
In each focus group, the question posed was:
Q1. What are the most important causes of uncertainty that inhibit effectiveness
of your transport operations?
When this question was asked, each participant wrote their suggestions on Post-It
notes, one comment per note. After that, each participant presented and discussed
individually their notes, while the other group members were encouraged to intervene
in the discussion so ideas may be developed further. In this discussion, participants
said why their selected uncertainty causes have a significant impact on their
operations. The group as a whole then categorised the individual Post-It notes into
clusters. We stated to the participants that, given the phrasing of the question posed,
we were assuming that the number of Post-It notes reflected each issues relative
importance. Although no one objected to this assumption, the facilitator ran
a discussion asking participants to confirm that the largest cluster represented the Sustainable
biggest challenge for their operations and/or industrial sectors. The clusters form the transport
main unit of analysis of this paper.
The data were synthesised using a two-way table to compare individual uncertainty operations
causes with top-level uncertainty clusters. This two-way table had two data levels,
aggregated, which included the number of Post-It notes per uncertainty cluster, and
disaggregated, which calculated the number of Post-It notes per sector. In order to add 67
more depth to the analysis the data from the two-way tables was triangulated with the
information from the transcribed audio recordings. Also, clusters were compared with
the participants sector to see to what extent the participants background may
influence their perceptions. The sector classification is based on the UK Standard
Industrial Classification codes (2007).
In Phase 2, an online questionnaire was designed based on the clusters or sources of
transport uncertainty derived from the focus groups. An online questionnaire was
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preferred over a mail questionnaire, since the sample targeted had access to internet
and for participants it could be faster to fill an online questionnaire rather than a postal
questionnaire. Also, the cost of the online questionnaire was 60 per cent of the cost of
postal questionnaire. In the questionnaire, practitioners were asked to:
.
Provide background information about their companies: annual turnover in
pounds, percentage of that transport cost represented from the annual turnover,
industrial sector and supply chain role (shipper, carrier or customer).
.
Select and rank the top four clusters of uncertainty that impact more on their
businesses, based on the 15 uncertainty clusters found in the focus groups.
.
Assess the economic and environmental impact that their top four uncertainty
clusters selected have on their companys transport operations using a five
point-Likert scale from 1 low impact to 5 high impact.
.
Evaluate the frequency of occurrence for their top four uncertainty clusters.
A five-item frequency scale was given daily, weekly, monthly, quarterly and
annually.
.
List up to five analysis and design tools that your company uses to improve the
efficiency of logistics operations. This was not exclusively limited to ICT
solutions.

Additionally, a definition of each uncertainty cluster was available in the electronic


survey, again based on the focus group findings. These definitions were developed as
an outcome of the focus groups. Table I shows the definitions included as part of the
online questionnaire.
A total of 15 practitioners were selected from focus group participants to pilot the
online survey first. Postal invitation letters were sent, and eight pilot participants
responded to the online pilot questionnaire. As a result of the pilot, a number of
changes were made to improve the readability, relevance and practicality of the survey.
For the full survey, a total of 5,000 companies were identified by using the Financial
Analysis Made Easy (FAME) database, from all industrial sectors where the
companies would be expected to either move goods or be directly involved in the
movement of goods. The only constraint imposed was a minimum company size of
250 employees. An online survey was developed, more details of which can be found in
IJPDLM Cluster Definition
40,1/2
Delays Delays occur when a delivery process takes place later than scheduled.
Delays are mostly caused by three factors: road network congestion, supply
disruptions, and operational problems in unloading and loading
Demand and The demand from customers may be highly volatile and sudden changes
information issues may occur due to seasonality and unexpected promotions. The main causes
68 of this include demand volatility, poor demand forecast accuracy and lack of
information visibility
Delivery constraints Delivery constraints are restrictions in the delivery process that can limit
normal transport operations. Delivery constraints are a result of three main
factors: delivery curfews at the customer facilities, restricted delivery
windows imposed by the customer, and limited storage capacity at the
customer depots
Rigid infrastructure The infrastructure of the road and rail network is not flexible in the short
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term and so inhibits the performance of transport. Rigid infrastructure can


occur at company, supply-chain and macro-level
Supply chain Integration within the logistics triad allows a holistic planning and execution
integration of all the logistics triad activities in the transfer of information and materials
flow. Insufficient supply chain integration lessens the visibility and
transparency of information within the triad. Uncertainty occurs when the
logistics triad processes are not properly synchronised, the communication
and information flow is not effective. The main factors that cause a lack of
supply chain integration within the triad are high customer demand for
transport flexibility, disconnections between sales and logistics departments
at the company level and lack of integration between carriers and customers
Cost Cost uncertainty relates to staff and asset utilisation. Macro problems like
driver shortages, volatility of fuel prices and congestion charges can
considerably affect cost. Internally, companies have operational issues that
negatively impact on cost as well
Technology The logistics triad members can have different levels of technology
capability causing unavoidable operational distortions in the ICT flow and
problems in the delivery process
Legislation Legislation determines the basic rules of the transport sector in the UK. It
must be sufficiently flexible so companies do not have constraints in terms of
staff and assets. However, legislation can impose restrictions on logistics
companies that can affect as usual trends
Complexity Complexity can increase if there are many variables involved in the delivery
process, leading to uncertainty. Causes include different and diverse
requirements from customers and drop deliveries to diverse portfolio of
customers
Inventory management An ineffective and fragmented inventory management approach can cause
issues operational problems in transport originating from a lack of stock available
within the supply chain, and sub-optimal inventory policies imposed by the
customers
Lack of communication Poor communication within the logistics triad at all levels leads to
information uncertainty within the logistics triad. Serious operational
problems can originate through:
Table I. lack of communication regarding delivery failure from carrier to customer
Definitions of the 15 insufficient driver-carrier communication
logistics uncertainty communication errors between shipper and customer that cause delivery
clusters found in the refusals
focus groups (continued)
Cluster Definition
Sustainable
transport
Returns Any operational issues originating from the reverse supply chain, including
processes like recycling, return of defective products and logistics operations
equipment, and remanufacturing
Global-sourcing Global sourcing imposes a challenge to the logistics triad, since the high
dispersion of raw materials increase the length of the supply chain. Causes of
uncertainty include operational problems of information visibility,
69
insufficient stock and quality of products
Lack of managerial In the company boardroom, there may not be a clear vision of the logistics
vision consequences from strategic decisions. Logistics as a strategic activity is not
embedded in other areas such as sales, design and manufacturing
Inter-modal operations A lack of fit between different transport modes, e.g. rail and road, can cause
operational problems in inter-modal operations. Also, operational issues
originating by rigid inter-modal facilities can cause problems in the delivery
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process Table I.

Appendix 1. The initial invitation letter was directed to a person that from the
company board identified in the FAME database, since companys logistics manager
and/or director names and contact details are not available in FAME. However, it was
requested that the details be passed to a person responsible for leading the logistics
department of the company. The survey was available between December 2007 and
February 2008. Follow-up activities included two e-mail reminders plus a sample of
25 per cent of the population was contacted by telephone. As part of this process, the
names and contact details of the person in charge of the logistics function of the
company was obtained for at least 30 per cent of the companies, and communication
was directed to these people instead.
By February 2008, 56 practitioners had completed the survey. As Table II shows,
responses were only received from a limited range of industrial sectors, with four
sectors particularly well represented. Based on the sectors that responded, the response
rate of the survey was just 3.6 per cent. While this is low, we are able to also use the
focus group data to give added depth to the analysis. Other supply chain researchers
also combined focus groups and survey findings where a low-response rate has been
obtained (for example, New and Payne, 1995). In Table II, we have indicated the four
sectors where we have used focus group data for extra depth.

Description Focus group data Population Responses Response rate (%)

Grocery manufacturing Yes 248 10 4.0


Retail Yes 153 11 7.2
Road freight transport Yes 291 20 6.9
Automotive Yes 161 9 5.6
Office Machinery No 35 1 2.9
Chemical No 212 2 0.9
Electrical No 110 1 0.9
Furniture No 161 1 0.6
Metal No 187 1 0.5 Table II.
Total 1,558 56 3.6 Survey sample
IJPDLM Furthermore, as recommended by Armstrong and Overton (1977), in order to estimate
40,1/2 the degree of non-response bias of the survey, two different non-parametric statistical
tests have been run: the independent-samples t-test and Spearmans correction. The
independent-samples t-test was used to compare the means between two data samples,
the early respondents and the late respondents. The result of this test was that not
significant difference between the two samples and that point towards the absence of
70 non-response bias. The Spearmans correction was applied to test the relationship
between the rankings of all the uncertainty clusters selected by the 56 participants and
the number of days they took to response to the online questionnaire. This test did not
found a significant correction between the rankings and time to response to the survey,
and as a result, non-response bias was not found.
To analyse the data, the 56 responses were categorised depending on their company
logistics cost and industrial sector. The total rankings of the 15 uncertainty clusters
were calculated. After that, the economic and environmental risk was calculated from
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the multiplication of frequency and impact (Pflug and Romisch, 2007). In order to
assess the relative importance of the 15 uncertainty clusters, the risk that each of them
represents was measured. In order to take account of the average as well as the
variation, the means and standard deviations of the risk scores were calculated for each
of the 15 uncertainty clusters. To calculate each individual risk score, the impact was
multiplied by the frequency. The former was already based on a numerical Likert scale
while, for the latter, the times were converted into a numerical scale where daily was
given a score of 5 and annually a score of 1. These findings were then analysed in
more detail based on the sectors of the respondent companies with a focus on those
sectors with both better response rates in the survey (between 4 and 9 per cent) and
comprehensive focus group results to provide extra depth to the analysis. As seen in
Table II, these sectors are grocery manufacturing, retail, road freight transport and
automotive. Frequency versus economic and environmental impact matrices were
drawn, with the findings broken down by sector. Moreover, a categorisation of the
tools that companies applied to mitigate uncertainty was undertaken and an analysis
based on the links between the main four uncertainty clusters found and the mitigation
tools categories has been carried out.

Overall results
In analysing the overall findings, we first consider the ranking of the uncertainty
clusters; Figure 3 shows a comparison of the results from the focus groups and survey.
The results shown in Figure 3 are based on the total number of Post-It notes from the
focus groups and the rank given by the survey participants. In order to compare the
focus group and survey overall findings, the number of Post-It notes per uncertainty
cluster from the focus groups and the sum of the ranking from all the survey
respondents for each uncertainty cluster were both normalised to a scale from 0 to 100.
The uncertainty cluster with more Post-It notes and higher survey ranking was given a
normalised frequency of 100. For both methods, this cluster was delays. From this, the
normalised frequencies for the other 14 uncertainty clusters were calculated taking
delays as a reference point.
According to the focus groups results, the four main uncertainty clusters are delays,
demand and information issues, delivery constraints and insufficient supply chain
integration. The survey confirms these as the transport uncertainty clusters in the
100
Normalised survey rank
Sustainable
90
Normalised frequency

80 Normalised focus group rank transport


70
60 operations
50
40
30
20
10 71
0
Delays

Demand and
information issues

Delivery constraints

Insufficients supply
chain integration

Cost

Complexity

Insufficient
communication

Legislation

Inventory
management issues

Global-sourcing

Rigid
infrastructure

Technology

Lack of
logistics vision

Returns

Inter-modal
operations
Figure 3.
Normalised rankings from
focus group and survey
results
Uncertainty cause
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UK operations. However, there are some slight differences between the focus group and
survey results. In the focus groups, insufficient supply chain integration is the third
most relevant uncertainty cluster followed by delivery constraints whereas, in the
survey, delivery constraints as an uncertainty cluster is the third most important and
insufficient supply chain integration is the fourth. Moreover, in the survey results,
complexity and legislation have more weight than in the focus groups.
The results for economic and environmental sustainability are shown in Table III and
are taken from the survey. The economic and environmental risk scores of each of the 56
responses were calculated by multiplying their responses on frequency and impact. The
means presented in Table III were calculated by averaging the economic and
environmental risk scores of the 56 responses. The economic risk measures have the same
pattern as the normalised rankings of the uncertainty clusters shown in Figure 3.
However, the environmental risk scores are generally lower and their rank is also different.
Delays as an uncertainty cluster have the highest economic and environmental
mean scores, but have also the highest standard deviations in the two cases.

Economic risk Environmental risk


Uncertainty cluster n Mean SD Mean SD

Delays 34 18.4 10.2 16.3 10


Demand and information 28 15.4 8.8 12.6 8.1
Insufficient SC integration 25 16.6 7.4 16.1 7.3
Delivery constraints 22 16.3 9 16.1 9.1
Cost 18 17.1 8.8 13.8 7.7
Complexity 17 14.6 8 13.4 7.3
Lack of communication 15 14.4 8.1 12.6 7.3
Legislation 13 15.7 7.8 13.9 7
Inventory management issues 10 11 4.8 6.3 3
Global-sourcing 9 11.4 4.7 11.7 4.9
Technology 6 16.3 5.4 14.8 5.1 Table III.
Returns 5 17.6 5.2 18.4 5.4 Mean and standard
Rigid infrastructure 5 11.8 4.5 9.5 3.5 deviation of the economic
Lack of logistics vision 3 10.5 3.2 16.3 5 and environmental risk
Inter-modal operations 3 8.3 2.3 10 2.5 scores
IJPDLM This means that even if this uncertainty cluster has a high mean, there is more
40,1/2 dispersion within its 34 responses. Therefore, there are a number of respondents that
perceive delays representing lower economic and environmental risk for their
transport operations than the average response. On the other hand, demand and
information issues as an uncertainty cluster has lower economic and environmental
mean risk scores and higher standard deviation than insufficient supply chain
72 integration, delivery constraints and cost.
In addition, in terms of environmental sustainability, the risk scores are lower than
the economic risk measures. Apart from that, there are other significant differences
between the economic and environmental mean risk scores. Demand information
issues as an uncertainty cluster has a lower mean and a higher standard deviation than
delivery constraints, cost and complexity. Another relevant trend in the environmental
mean risk score trend is that technology and returns have considerably high means
and low standard deviations. However, these two uncertainty clusters have only five
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and six responses, respectively. Moreover, global sourcing, rigid infrastructure and
inter-modal operations have the lowest economic and environmental mean risk scores
and the lowest standard deviations. These three uncertainty clusters do not seem to
represent a considerable challenge for the vast majority of the sample.

Sectoral analysis of uncertainty


As noted earlier, it is possible for four sectors to compare and contrast the findings, based
on the survey and the focus group results. These sectors are automotive, grocery, retail
and road freight transport. It is important to clarify that the grocery sector is formed by
manufacturers of grocery products and the retail sector includes retail companies that
distribute and sell fast moving consumer goods (FMCG), clothing and grocery products. It
is the intention to use the survey results to evaluate the risk scores for each of the top four
uncertainty clusters, using the focus group findings to provide more depth of
understanding to aid the analysis. Frequencies are ranked as high, medium and low,
where ranks daily and weekly are high, monthly is medium and quarterly and
annually are low. As such, the risk analysis is more qualitative in nature.

Delays
Figure 4 shows the risk assessment for delays for the four sectors. Generally, delays
occur daily or weekly and have a high economic impact. According to the survey
participants, delays seem to have higher economic than environmental impact on
transport operations in the automotive, grocery and retail sectors. However, the only
exception to this is the road freight sector, where delays are perceived as having
equally high economic and environmental impact. This can be explained by the fact
that delayed vehicles missed the load allocated to them, so this originate the needed of
extra trips that add into the total transport cost and the CO2 emissions. Also, delays
occur very frequently in the grocery, retail and road freight sectors, whereas the
frequency of this uncertainty cluster is lower in the automotive industry.
In the focus groups, participants from these sectors provided the root causes of delays.
In the case of the automotive sector, delays were caused primarily by two factors, lack of
reliability on the delivery process at the carrier and unplanned congestion. The carrier
moving components for this sector does not communicate failures on time to the
manufacturer and does not have an effective system in place to predict unplanned
Frequency Frequency Sustainable
L M H L M H transport
operations
H H

Environmental impact
73
Economic impact

M M

L L
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Figure 4.
Automotive Grocery
Economic and
100% 80% 60% 40% 20% 0% environmental impact and
Retail Road freight Percentage of responds frequency of delays

congestion. In the grocery, retail and road freight transport sectors, the factors impacting
on delays are failures at the shipper side and disruptions in the loading and unloading
processes. Vehicles need to wait for the load longer than advised at loading bays, since
often the product in not ready for despatch. Also, vehicles are usually warehouses on
wheels (to quote one participant) waiting for the products to be unloaded. If a vehicle is
held at loading and/or unloading points, this can affect the next delivery scheduled for that
vehicle and can originate the need for an extra trip.

Demand and information issues


According to the survey participants, demand and information issues have higher
economic than environmental effect on transport operations in the grocery, retail and
road freight sectors (Figure 5). However, in the automotive sector, 100 per cent of
respondents perceive this uncertainty cluster as having a very high economic and
environmental impact on transport operations. This can be explained by the fact that
product demand uncertainty can affect vehicle demand in grocery and retail, but
through the application of transport consolidation this problem can be mitigated. Also,
demand uncertainty affects the inventory holding cost more than the transport cost. In
the automotive sector, transport operations are more specialised, so there are less
opportunities to consolidate deliveries. Moreover, demand and information issues
happen very frequently in all the sectors that took part in the survey. Most of
companies have continuous replenishment or just-in-time delivery as a supply chain
strategy while retailers offer very frequent promotions to the end consumers.
From the focus group data, the root causes of variable demand and inaccurate
information in transport operations are derived. In the automotive sector, demand and
information issues originate primarily by two factors, changing business patterns at
IJPDLM Frequency Frequency
40,1/2 L M H L M H

H H

Environmental impact
74
Economic impact

M M

L L
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Figure 5.
Economic and
Automotive Grocery
environmental impact and
frequency of demand and 100% 80% 60% 40% 20% 0%
information issues Retail Road freight Percentage of respondents

the strategic level and lack of demand accuracy. The business rules in this industry can
change very frequently, and the source of raw materials can vary depending on how
the total cost varies. This can greatly affect transport operations in this industry. Also,
the lack of supply chain visibility can affect the accuracy of the demand forecast,
since the first and second tier suppliers need to estimate the demand for products,
which produces demand amplification throughout the supply chain. In the grocery and
retail sectors, the factors influencing more on demand and information issues is daily
volume changes on the customer requirements, because the retailers very often offer
promotions to the end consumers and these promotions are not properly communicated
to the carrier and the grocery manufacturer. Furthermore, in the retail sector, there are
also other root causes of uncertainty, e.g. lack of information visibility and sub-optimal
inventory policy. The communication, particularly in regards of management of
demand forecast processes throughout the logistics triad, is often not the best.

Delivery constraints
Figure 6 shows a risk assessment of delivery constraints for the four sectors studied in
more detail. With the exception of the automotive sector, delivery constraints happen
daily or weekly and have a high-economic impact. Also, in the grocery and retail sectors,
delivery constraints have an equally high proportion of respondents that perceive
delivery constraints having a high-economic impact and high-environmental effect on
transport operations. In the road freight transport sector, 88 per cent of the respondents
perceive delivery constraints having a high impact on the economic performance of
their companys transport operations whereas 100 per cent of respondents think that
this uncertainty cluster has a high impact on the environment. However, in the
automotive industry, more respondents think that delivery constraints have more
Frequency Frequency Sustainable
L M H L M H transport
operations
H H

Environmental impact
Economic impact

75
M M

L L
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Figure 6.
Economic and
Automotive Grocery
environmental impact and
100% 80% 60% 40% 20% 0% frequency of delivery
Retail Road freight Percentage of respondents constraints

impact on the environment than the economic performance of their company. In the
grocery, retail sectors and road freight sectors, due to delays at unloading bays at stores,
vehicles cannot achieve their scheduled backloads, so extra trips are needed to react to
this issue. This has a direct effect on cost and CO2 emissions. On the other hand, in the
automotive sector, delivery restrictions are less critical to the performance of transport
operations, since there are less volume of vehicles arriving to loading and unloading
bays, so the queuing time could be much less.
Next, the root causes of delivery constraints are briefly explained. In the automotive
sector, delivery restrictions originate primarily by inefficiencies within the delivery
process at load consolidation locations. These inefficiencies can make the vehicles miss
backloads scheduled in the initial plan, so extra trips are needed. In the grocery and
road freight transport industries, the factors impacting more on this uncertainty cluster
are delivery curfews at stores located in urban areas and limited storage capacity
within secondary distribution channels. This originates the need for tighter and tighter
delivery windows that ultimately have a negative effect on subsequent scheduled trips.
Therefore, this can also generate the need for unnecessary extra trips. Furthermore,
according to the focus groups participants, the retail sectors usually do not perceive the
impact that delivery restrictions have on other members of the logistics triad. This is
because, they impose delivery windows on their partners, but they do not have the
opportunity to see the consequence that this delivery restriction has on the overall
performance of the logistics triad.

Insufficient supply chain integration


As can be shown in Figure 7, most of the survey participants from the road freight
sectors perceive insufficient supply chain integration having an equally very high
economic and environmental effect on their transport operations. In the automotive
IJPDLM Frequency Frequency
40,1/2 L M H L M H

H H

Environmental impact
76
Economic impact

M M

L L
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Figure 7.
Economic and
Automotive Grocery
environmental impact and
frequency of insufficient 100% 80% 60% 40% 20% 0%
supply chain integration Retail Road freight Percentage of respondents

sector, a higher number of respondents perceive insufficient integration having a high


impact on economic performance than on environmental performance. The grocery
sector presents a different trend to the retail sector, 87 per cent of the respondent
perceives insufficient supply chain integration to have a high-environmental impact
whereas 71 per cent of them think that this uncertainty issue has a high-economic
impact. On the other hand, in the retail sector, 50 per cent of respondents think that
insufficient supply chain integration has a high economic and a environmental impact
on transport. One explanation to this may be that there is little impact on retailers as
consumers have alternative products that they can purchase and some buffer stock is
held at DCs to cope with uncertainty. An alternative consideration is the alleged
pressure put on suppliers to make deliveries (Blythman, 2004), resulting in a low level
of delivery failures even when there are integration issues.
In the automotive industry, this uncertainty cluster is caused mainly by excessive
flexibility on service level excepted from manufacturers and the increasing complexity
within distribution networks. This can increase the frequency of deliveries scheduled by the
manufacturer, so delays can occur and as a result extra trips can be needed. In the retail
sector, the factors affecting on this uncertainty cluster are disconnections between the sales
and logistics department within the shipper and the carrier. At the shipper, the sales
department agrees a very loose contract with their customers and the logistics department
cannot execute it with the expected level of efficiency. Therefore, there are a high proportion
of extra miles that can be avoided if the logistics department is involved in the negotiation of
new contracts. Also, horizontal network duplication between third party logistics providers
can affect the level of supply chain integration in the retail sector, since usually carriers do
not interact from the planning process and if they have a sudden increase in volume they
need to subcontract an extra trip at the last minute. This is very typical in the retail sector
because of the fact that a high proportion of the demand for transport fluctuates because of Sustainable
promotions. Furthermore, in the grocery sector, supply chain integration does not seem to be transport
on top of the priority list for the focus groups participants. Moreover, in the road freight
transport sector, disconnections between the sales department and the logistics departments operations
is the main factor that impact on the degree of supply chain integration of the logistics triad.

Tools applied to mitigate logistics uncertainty 77


According to the survey findings, a high proportion of respondents applied analysis and
design tools that can support their companies to mitigate the effect of the four main
uncertainty clusters found. Table IV shows the link between the main four uncertainty
clusters and the mitigation tools that companies that responded to the survey applied.
In the case of both delays and delivery constraints, the results suggest that a
combination of strategic optimisation (such as network modelling software),
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operational optimisation (for example, vehicle scheduling and routing software) and
quality management tools (like total quality management) are used. Strategic
optimisation ensures that the distribution networks are robust to disruptions, while
operational optimisation allows businesses to respond to uncertainty as quickly as
possible while minimising the overall impact. Quality management allows the causes
of uncertainty to be addressed, to reduce their frequency and impact in the longer term.
Demand and information issues were frequently dealt with through forecasting
tools, which are designed to improve accuracy and therefore reduce uncertainty. These
tools may often encourage information sharing between businesses and therefore
address supply chain integration issues as well. Integration issues can also be
accommodated within the distribution network through strategic design.

Concluding remarks
The aim of this paper has been to investigate the links between uncertainty in
transport operations and their impact on economic and environmental sustainability.
Through the focus groups and surveys, four main areas have been identified as
causing uncertainty in transport operations delays, demand and information issues,
delivery constraints and insufficient supply chain integration. Survey respondents
indicated that there are significant consequences that arise from these uncertainty
sources, both in economic and environmental terms.
In the grocery, retail and road freight transport sectors, road congestion represents
the biggest individual issue leading to uncertainty. While congestion due to road works
and peak traffic flows can be incorporated into transport planning, unplanned
congestion (for example, due to an accident) leads to greater disruption. The presence
of delivery windows further compounds this issue. The challenge for transport
providers is to mitigate the impact of this unplanned congestion without impacting
significantly on the efficiency of their operations. Also, the disconnection between the
sales and logistics departments has a considerable impact on integration within the
logistics triad, which can lead to distorted information flows through the supply chain.
Referring back to the framework proposed by McKinnon (2007, Figure 2), the
impact on environmental sustainability can be seen more clearly. The root causes
identified for delays and delivery constraints particularly have an impact in terms of
the average load on laden trips and empty running. The results suggest a lack of
supply chain integration and information distortion can also affect these key ratios.
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78
40,1/2

Table IV.
IJPDLM

logistics uncertainty
Tools applied to mitigate
Percentage of usage amongst respondents who ranked
Mitigation tool the cluster as
High- High
Strategic Operational Demand Quality High-economic environmental frequency
Uncertainty cluster optimisation optimisation forecasting management impact (%) impact (%) (%)

Delays X X X 64 66 83
Demand and information
issues X 90 90 50
Delivery constraints X X X 100 100 88
Insufficient supply chain
integration X X 80 80 80
However, there may be additional impacts in terms of the length of haul and handling Sustainable
factor. The only key ratio that we have not found any link to is modal split. This may transport
be because the focus of respondents has been on their current operations rather than
strategic decisions such as choice of mode. operations
With regards to the mitigation tools applied by UK companies to lessen the effect of
delays and delivery constraints, the companies more affected these uncertainty clusters
apply strategic optimisation tools when designing the network, operational optimisation 79
tools to set the transport plan and quality management tools to monitor the execution of
the transport plan. Moreover, respondents stated that demand forecasting tools are
applied to lessen the effect of variable demand and/or inaccurate forecast, and at the
same time, to achieve better supply chain integration within the logistics triad.
With regards to research limitations, the findings are based on the perceptions of
participants from the focus groups and the survey. The demographics of participants
in each phase of the data collection differ. The survey includes only practitioners from
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shippers, carriers and customers, whereas representatives from trade bodies and
government institutions took part in the focus groups. Therefore, the findings are not
perfectly comparable. The targeted profile of participants was middle to senior
management, which may distort their perceptions of different types of uncertainties
and their impacts. Finally, the survey sample size was small, with a low-response rate,
which affects the generalisability of the findings.
To further the research, the findings should be verified through the investigation of
real-world situations, measuring the marginal impact, in economic and environmental
terms, of logistics disruptions from the loading process at shipper facilities up to the
unloading process at distribution centres and stores. This can be achieved by
measuring impact of uncertainty on transport performance in terms of additional
distance run and unnecessary time added to the transport plan during the execution of
the delivery process. These uncertainty assessments will need to be undertaken in
distribution networks from the sectors that took part in the focus groups and survey.
Moreover, the transport uncertainty model needs to be incorporated within a wider
business process improvement approach to proactively develop and evaluate solutions
to reduce transport uncertainty within supply chains. In order to do this, the different
mitigation approaches applied by transport operations in the sectors that took part in
the research need to be explored, and their effectiveness evaluated for example,
through business process simulation.
Finally, given the importance that the focus groups participants attribute to
unplanned road congestion, the economic and environmental impacts of unplanned
road congestion need to be measured by accessing accurate telematics data of actual
versus planned miles at an individual trip level. Also, it is important to establish
whether unplanned road congestion is the major cause of delays and/or also generate
unnecessary miles run due to vehicle diversion from the optimal route.

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Appendix 1. Copy of the online questionnaire


Purpose of the questionnaire
The purpose of this questionnaire is to collect information about supply chain uncertainty in
logistics triads in the UK and their impact on economic, environmental and societal
sustainability. Supply chain uncertainty refers to decision-making situations in the supply chain
in which the decision maker does not know definitely what to decide. In practical terms, the main
causes of supply chain uncertainty can be classified as followed:
.
The decision maker does not have enough and/or reliable information, e.g. stock level, lead
time, customer satisfaction, supplier performance and so on.
.
ICT systems available to the decision maker do not have the capacity to process
sufficiently disaggregated information.
.
The forecasting and planning tools available to support decision making are not sufficient
accurate, and as a result the decision maker is misled.
.
Throughout the different supply chain stages, disruptions can occur that can ultimately
have a adverse effect on the subsequent processes (van der Vorst and Beulens, 2002).

This questionnaire forms part of the research for the Green Logistics project sponsored by the
Engineering and Physical Science Engineering Council (EPSRC). The questions are based upon
IJPDLM the findings of eight focus groups. Therefore, this survey is a confirmatory tool of previous
research and informs future research within the project.
40,1/2 The results of this survey will be published on the Green Logistics web site, www.greenlogis
tics.org, and they will be available to all the practitioners that take part.
Please, avoid using the back button in your internet explorer browser while you are
answering the questionnaire, since that could disrupt the flow of the questionnaire. If you have
any queries with a question, please click on the question mark provided, this will open a pop-up
82 window. In order to test whether you have pop-up blocker enable, please click on this question
mark (?). The survey works best with pop-up blocker disable.

Part 1. Background information


Information sought within this section included:
.
the type of company (Shipper, carrier, customer and other);
the size of company by number of employees;
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.
annual turnover in the UK (m);
.
logistics costs as percentage of turnover in the UK; and
.
industrial sector.

Part 2. Sources of pains within the logistics triad

Question
number Wording Response mode

1 List what you consider to be the four most Tick box against list of uncertainty
common sources of disruption/uncertainty in causes
the day-to-day logistics operation of your
business. A definition of each term is available
including exemplar causes of uncertainty
2 Rank the four sources of disruption identified Ranking scale (only the four selected in
above, with the most serious ranked as 1 Q1 were presented)
3 For each of the four sources identified above, Likert scale
what is their impact on economic and
environmental sustainability? (The scale is
between 1 and 5, 1 is a significantly low
impact and 5 is significantly high impact)
4 How frequently are your logistics operations Frequency scale
disrupted by each of the four main sources
Table AI. identified above?

Part 3. Logistics triad uncertainty mitigation


Question 5. List the five analysis and design tools that your company uses to improve the
efficiency of logistics operations (a definition of tools was provided).

Part 4. Acknowledgement and benefits


We thank you for taking part in this survey, and will send you a final report with the results of
this research early in 2008. You will receive update information while the project evolves, such as
new published academic papers, executive reports of all the research streams and user-level
access in the Green Logistics webpage, develops up to June 2010. If you would like further
information on the Green Logistics project including regular updates on forthcoming activities, Sustainable
please provide your details below. This information will be kept confidential.
transport
operations
About the authors
Vasco Sanchez-Rodrigues graduated his first degree in Chemical Engineering at the Simon Bolivar
University in Venezuela. After completing his bachelors, he worked in Bimbo Organisation, the
leader in the bakery sector in North and Latin America, performing management roles in
83
manufacturing and projects. He reinitiated his academic career at Cardiff University, where he
graduated Master of Business Administration in 2005. Following the completion of his masters, he
initiated his career in supply chain management and logistics research in Logistics Systems
Dynamics Group (LSDG), working in the Fabric-to-Furniture Project in an early stage, and
currently he is a Research Associate in a Green Logistics project sponsored by the Department for
Transport and funded by the EPSRC. Vasco Sanchez-Rodrigues is the corresponding author and
can be contacted at: sanchezrodriguesva1@cf.ac.uk
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Andrew Potter is a Lecturer in Transport and Logistics at Cardiff University. The main focus
of his research has been on the interaction between transport and the rest of the supply chain. He
is particularly interested in how transport can be better integrated into the supply chain. This
formed the basis for his PhD thesis, which was awarded a Highly Commended award in the 2nd
Annual EFMD/Emerald Outstanding Doctoral Research Awards in 2006.
Mohamed M. Naim, a Member of the Chartered Institute of Logistics and Transport in the
UK, is a Professor in Logistics and Operations Management at Cardiff Business School. He is a
Director of the Logistics Systems Dynamics Group and the EPSRC funded Cardiff University
Innovative Manufacturing Research Centre, where he is leading a programme of research on
Sustainable Logistics. Research includes the establishment of transport collaboration models for
supply chain management and the derivation of flexibility measures for supply chain system
archetypes. He is a former Editor-in-Chief of the International Journal of Logistics and is an
Advisory Committee Member for the International Symposium on Logistics. He has published
over 60 journal papers including publications in the American Society of Transportation and
Logistics Transportation Journal, International Journal of Logistics Management, International
Journal of Logistics: Research and Applications, and International Journal of Physical Distribution
& Logistics Management.

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